2. 1 © The Delos Partnership 2005 Procurement Masterclass Prerequisites

3. 2 © The Delos Partnership 2005 Prerequisites Suppliers want Long Term Visibility if they are strategic suppliers Stability when commitments are made Realistic performance Measures Accurate data as a foundation

4. 3 © The Delos Partnership 2005 The Delos Model For Business Integration Innovation Innovation Vision Strategy Prioritisation Prioritisation Demand Support Supply

5. 4 © The Delos Partnership 2005 Objectives for Integrated Enterprise Leadership One set of numbers at all times Integrated Plans Realistic Plans Teamwork Communication of goals and objectives Decisions made in timely fashion Consistent performance measures Delivery of the Strategy

6. 5 © The Delos Partnership 2005 Vision and Strategy Vision –Clear statement of direction –Understood by all Strategy –Means of getting there –Requires clear focus Operational Excellence Customer Intimacy Product Leadership

7. 6 © The Delos Partnership 2005 Supporting Processes There are three supporting processes –Innovation New products New processes –Customer Relationship management Sales linkage Marketing linkage –Supplier Relationship management

8. 7 © The Delos Partnership 2005 Management of Innovation Needs Management across all the projects

9. 8 © The Delos Partnership 2005 Forecasting Needs a Simple Process Filter Demand Execute Forecast Capture Actual C O N S E N S U S F O R E C A S T Review Commercial Plans Review Exceptional Demand Hold Demand Review Assumptions written down and agreed

10. 9 © The Delos Partnership 2005 Master Scheduler Strategy Master Scheduler Sales Forecasts Customer Orders Manufacturing Plan Purchasing Plan Purchasing Plan MRP System Balanced Plan

11. 10 © The Delos Partnership 2005 Basic Equations Item Data BOM’s And Routes Stock And Capacity Master Schedule ForecastsOrders Suppliers Factories What do they Want ? What have We got ? What does it need ? What do we need to do ?

12. 11 © The Delos Partnership 2005 Vertical Functional Organisation MD Sales Marketing Technical Operations Finance HR R&DR&D R&DR&D MKTGMKTG MKTGMKTG SALESSALES SALESSALES OPSOPS OPSOPS ACCTSACCTS ACCTSACCTS HRHR HRHR Directors Managers Supervisors/Team Leaders

13. 12 © The Delos Partnership 2005 Vertical Functional Organisation MD Sales Marketing Technical Operations Finance HR R&DR&D R&DR&D MKTGMKTG MKTGMKTG SALESSALES SALESSALES OPSOPS OPSOPS ACCTSACCTS ACCTSACCTS HRHR HRHR Directors Managers Supervisors/Team Leaders Demand Process Innovation Process Supply Process

14. 13 © The Delos Partnership 2005 Velocity Measure STORESTORE STORESTORE INSPECTINSPECT INSPECTINSPECT RECEIVERECEIVE RECEIVERECEIVE PICKPICK PICKPICK RUNRUN RUNRUN INSPECTINSPECT INSPECTINSPECT STORESTORE STORESTORE RUNRUN RUNRUN INSPECTINSPECT INSPECTINSPECT STORESTORE STORESTORE Elapsed Time VA Velocity % = sum of Value Added Time [VA] ------------------------------------- Total Elapsed Time

15. 14 © The Delos Partnership 2005 People Values TraditionalNowFuture Process problems Not my jobOwnershipAccountability Management Style SuperviseFacilitator/ Team Leader Coach Working Style IndividualTeamEmpowered Teams Training and Education Non-existentLuxuryNecessity KnowledgeIgnorantUnderstandsExpert Attitude to People LiabilityCostAsset

16. 15 © The Delos Partnership 2005 Results Suppliers want Long Term Visibility if they are strategic suppliers Stability when commitments are made Realistic performance Measures Accurate data as a foundation Integration provides: IEP plus Forecast Master Schedule provides stability The core measures are not biassed Data accuracy essential

17. 16 © The Delos Partnership 2005 Successful negotiation is based on partnership Once the partnership is established for critical and strategic suppliers, we should look to improve their processes thereby leveraging the total value of their business

18. 17 © The Delos Partnership 2005 Change Minds not just systems Successful change CULTURE TEAMWORK SHARED VISION COMMUNICATION WAYS OF WORKING ACCURACY AND DISCIPLINE POLICIES AND PROCEDURE HARDWARE SOFTWARE ACCURATE DATA VALID SCHEDULES SYSTEM

19. 18 © The Delos Partnership 2005 Real challenge Acceptance of common sense Avoid initiativitis Make the routine really routine Free up time to think and behave strategically

20. 19 © The Delos Partnership 2005 Delos Change Journey MobiliseDesignCommunicateReviewUnderstandASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS